RENAULT NISSAN- TAKEOVERS AVTOVAZ LADA

PRESENTED BY ISLAM KILANIYA

Renault and its Japanese subsidiary Nissan announced a big step in the Russian market on Thursday, heading for control of the Lada brand to become the third-biggest auto force in the world.

Since 2008 Renault has owned 25% of Avtovaz. The deal, organized via a new joint holding company, will cost Renault $300 million. Nissan, which will not own any of the capital, will provide $450 million.
The deal, under negotiation for months, will make RenaultNissan-Avtovaz the third-biggest auto group in the world.

 Renault Nissan and Avtovaz accounted for 878,990 of this total, and
of their production 578,387 vehicles bore the Lada brand.
Under an agreement with Russian state group Russian Technologies and investment bank Troika Dialog, Renault Nissan will end up owning 67.13% of a holding company. The rest of this holding venture will be owned by Russia Technologies.

 It wants to raise production to nearly 1.4 million vehicles per year by 2015.

 The holding company will in turn own 74.5% of Avtovaz and the rest will be quoted on the stock market. The holding venture will buy 20% of Avtovaz owned by Troika Dialog by 2014, the statement said but did not say how much would be paid for this stake. Debt owed by Avtovaz will be restructured by Russian Technologies which will then receive money raised from the expected sale of non-strategic assets owned by Avtovaz.

Outstanding, interest-free loans, with long maturities, would then amount to about 1.56 billion.

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